The Central Bank of Malta's Business Conditions Index indicates that in March, annual growth in business activity was broadly unchanged from February, and remained below its long-term average.

"The European Commission's economic confidence indicator increased in March, but remained below its long-term average. The Commission's employment expectations indicator also stood below its long-run average. Price expectations increased in the construction sector, and to a lesser extent in industry and among consumers, but decreased in the retail and services sectors."

Developments in activity indicators were mixed, as industrial production contracted on a year earlier, while retail trade rose in annual terms, the Central Bank said. "Unemployment remained low from a historical perspective."

"Residential permits were higher in February compared with their year-ago level. In March, the number of residential promise-of-sale agreements rose on a year earlier, but the number of final deeds of sale declined. In February, Maltese residents' deposits, forming part of the broad monetary aggregate M3, rose above their year ago level for the third consecutive time, following declines in the latter half of 2023. This increase was mostly driven by balances belonging to households. Meanwhile, annual growth in credit to Maltese residents increased compared with a month earlier."

"In March, the annual inflation rate based on the Harmonised Index of Consumer Prices (HICP) fell to 2.7%, while HICP excluding energy and food, remained below the euro area average. Meanwhile, inflation, according to the Retail Price Index (RPI), decreased to 1.9%, the lowest rate since July 2021."

It said that in February, the Consolidated Fund recorded a slightly lower surplus compared to a year earlier.

The full Economic Update is available here.